Dutch coalition faces questions over cost of ending tax on unrealized investment gains

Dutch coalition parties’ plan to stop taxing unrealized gains—profits on stocks, real estate, and other investments that have not yet been liquidated—is drawing scrutiny over its financial impact, with no funding currently identified, officials said.

Last week, the coalition presented plans to accelerate changes to the Box 3 wealth taxation system, scheduled to take effect in 2028. Under the proposed system, taxes would eventually be levied only on profits when assets are sold, rather than on annual paper returns that investors have not yet realized.

During a parliamentary debate, ChristenUnie member Pieter Grinwis questioned whether the coalition had considered the impact on the treasury, noting that no resources had been reserved. Caretaker State Secretary for Finance Eugène Heijnen (BBB) agreed, saying, “I also read the coalition agreement and the financial framework, and I had the same question.”

Heijnen, who supports a capital gains tax, described the current proposal as “an intermediate step” and emphasized that decisions about the final system are for the incoming cabinet and Parliament. “I assume that attention will also be paid to the budgetary consequences,” he said.

So far, calculations have only been made for exempting unrealized gains on real estate and startup shares under the current proposal, which is estimated to cost 23 billion euros over ten years. Heijnen said new calculations would be needed to determine the full financial effect of a complete capital gains tax.

Despite the uncertainty, a broad parliamentary majority appears likely to support a full capital gains tax, including coalition parties, JA21, and BBB. Luc Stultiens of GroenLinks-PvdA criticized the approach, saying it is “unbelievable” that these parties already know what they want without knowing the cost.